In a webinar sponsored by the Harvard Business Review, Baruch Lev, professor of
Accounting and Finance at the Stern School of Business of New York University,
debunked a number of favorite investor myths not with opinions but with quantitative
The webinar is based on Lev’s latest book, “Winning Investors Over: Surprising Truths about Honesty, Earnings Guidance, and Other Ways to Boost Your Stock Price.” He points out that capital markets are crucial to companies’ success and those who lead them. But corporate leaders are largely mired in misconceptions that
govern their behavior to the detriment of employees, investors and interested
parties. Perhaps one of the biggest myths is that investors are focused on
short term, quarter-to-quarter results.
Instead, Dr. Lev presents detailed research that charts how investors
are patient and have strongly supported long-term growth investments from 1947 to 2007.
The bromide to winning this battle is honest, regular communication with investors coupled with conservative accounting. He advises companies to go beyond required
disclosure to enhance investor understanding. And actions such as corporate leaders increasing their personal investment in a company also goes a long way to convey credibility. “Share some knowledge. Let your investors know what’s in the
pipeline of products.”
By challenging conventional wisdom and backing it up with research, Baruch Lev gets it right.